Helios And Matheson Plummet In To Penny Stock Territory After Borrowing Announcement

John Menzies is selling its print media division to Endless for 74.5 million pounds following shareholder pressure to offload the unit. The aviation and distribution services company said Thursday that the move will mark its exit from the print media and retail logistics market, and further its strategy of becoming a pure play global aviation services business.

Investors, including Lakestreet Capital Partners, have contended over the past few years that focusing on aviation would lead to an increase in Menzies’ shareholder value. Menzies’ decision reflects the contrast between a struggling print media industry faced by declining newspaper circulation and an aviation industry growing as demands for services like cargo-handling, ground-handling, and fueling increase.

What we’ll be watching for this week

Will shareholders of Western Troy Capital Resources support Resurgent Capital’s four-person slate at the company’s annual meeting Wednesday?

Will Crystal Amber increase its De La Rue stake to 10% as indicated by media reports?

Will shareholders of Rite Aid and Albertsons listen to Institutional Shareholder Services and Glass Lewis’ recommendations and vote against the proposed $24 billion merger of the two retailers?

Activist shorts update

Shares in Helios and Matheson have plummeted into penny stock territory after the company announced that it was borrowing $5 million from Hudson Bay Capital to keep its MoviePass service online.

Helios took the loan after a “service interruption” on Thursday caused by the company’s inability to make certain required payments. MoviePass tweeted Thursday evening that its subscribers were having trouble logging on to its online service and asked for patience, as it recommended against attempting to use the $10-a-month pass at theaters. The next day, it said that it had resolved the issue with its card check-ins, but later noted on Sunday that some users were still having issues with the method. “In the meantime, all e-ticketing remains fully functional,” MoviePass stated.

Last year, The Street Sweeper placed a bet against Helios and Matheson, claiming MoviePass subscribers were angry about the site’s bugs. The short seller also warned shareholders that MoviePass was threatened by a lawsuit from AMC and that the company omitted information and tweaked details about the backgrounds of its leadership.

Author: Jacob WolinskyJacob Wolinsky is the founder of ValueWalk.com, a popular value investing and hedge fund focused investment website. Prior to ValueWalk, Jacob was VP of Business Development at SumZero. Prior to SumZero, Jacob worked as an equity analyst first at a micro-cap focused private equity firm, followed by a stint at a smid cap focused research shop. Jacob lives with his wife and three kids in Passaic NJ. -
Email: jacob(at)valuewalk.com - Twitter username: JacobWolinsky - Full Disclosure: I do not purchase any equities to avoid even the appearance of a conflict of interest and because at times I may receive grey areas of insider information. I have a few existing holdings from years ago, but I have sold off most of the equities and now only purchase mutual funds and some ETFs. I also own 2.5 grams of Gold